Israel says it will continue building a security fence in the West Bank along its planned route, despite opposition from U.S. President George Bush.

Israel's foreign minister, Silvan Shalom, said Sunday that efforts are continuing to complete a security barrier in the West Bank in a bid to prevent Palestinians crossing into the Jewish State to carry out attacks.

He was responding to criticism of the project by President Bush, who said Friday that the fence is a problem because it makes it hard to develop a contiguous Palestinian state.

Mr. Shalom told Israel radio he believes Mr. Bush also supports a security fence for a period in which there was terror.

At the same time, the Israeli foreign minister acknowledged that the U.S. administration is seeking a change in the route of the fence to prevent it from causing undue hardships for the Palestinians.

Mr. Shalom said Israel would pursue talks with the United States with the hope of reaching a compromise over the issue.

He also said the current situation is intolerable following a threat by the militant Islamic group Hamas to punish Israel for raiding a bomb factory in a Palestinian refugee camp near the West Bank city of Nablus on Friday.

Two Hamas activists and an Israeli soldier were killed in the operation. A Palestinian stone-thrower was killed shortly afterward by Israeli troops.

Thousands of Palestinians attended the funerals of the three Palestinians on Saturday. Masked gunmen fired in the air, and mourners waving Hamas flags vowed to avenge their deaths.

The group's leaders, however, stopped short of saying the incident would destroy the cease-fire.

But Mr. Shalom said Palestinian groups such as Hamas were exploiting their self-declared truce to build up their military capabilities.

He said the Palestinians had, in his words, not fulfilled their responsibilities, and as a result all diplomatic activity is, in his words, now on hold.